The Jaguar has changed its spots

BOB ST GERMAIN was in the Jaguar dealership in White Plains, New York State, on Friday, picking up his new car. "A year ago you couldn't have given me a Jaguar," he said. "I had a 1992 model before and it was horrible. It had a couple of engine jobs, electrical problems - you name it."

So why is he buying a new one? "It's a different car. I read the consumer reports and they said everything had been fixed. And I've driven a Lexus and a Mercedes and I didn't like them - so I've bought a new Jag."

This is music to the ears of Jaguar's managers in Coventry, and to its ultimate bosses at Ford in Detroit. If Mr St Germain's views are typical, it seems the Americans are prepared to forgive and forget the pain the British big cat has inflicted on them in the past.

After decades of unfulfilled promise, the good times really do seem about to roll for Jaguar. In the last month it has unveiled its elegant new sports car, the XK8, and last week the EU agreed that the British government can give it an pounds 80m grant, which will allow it to start building its new small saloon in the West Midlands in 1998.

According to the consultancy DRI/McGraw-Hill, the company's production should rise from 41,000 cars this year to 80,000 in the year 2000. Garel Rhys, motor industry professor at Cardiff Business School, believes that even this figure is modest. The upgraded factories should have a capacity of about 140,000 a year on a single shift, and more like 200,000 on a double shift. "The possibilities for growth are pretty dramatic," he says.

But the ability of Jaguar to sell much higher numbers depends in large part on whether Mr St Germain's compatriots are as convinced as he that the beast really has changed its spots.

The Jaguar has never had a good reputation for being well made, but it was not until the Eighties that the gap with other cars became embarrassing. When John Egan took over in 1982, he used the weakness of the pound to push the cars hard into the US. Sales there went from 5,100 in 1981 to 24,500 in 1986. The workforce rose, too, from 7,000 to 12,000. But fundamental industrial relations, quality and productivity problems remained untackled. "That was when we had real horror stories," Prof Rhys says. US dealers told stories of selling a car on a Friday, fully expecting to see it back again on Monday morning with its apoplectic owner in attendance.

The company, floated in 1984, launched its new saloon in 1986 on a shoestring, spending less on development than Mercedes did on the rear axle and suspension alone of its new C-Class. At the same time, Americans were being tempted by the superiorJapanese Lexus, and US sales started to drop. By 1990 they were down to 18,700 - then the recession hit and they collapsed, bottoming out at 8,700 in 1992.

Ford bought Jaguar in 1989, but it was only when the latest XJ saloons were launched in 1994 that owners noticed any difference. Thanks to massive investment, streamlined production, and the disappearance of the last militant workers during the recession, Jaguar had finally joined the modern automotive age. US consumer reports have shown that the cars have improved to a startling extent. Many Americans have always preferred the Jaguar's styling and leather-and-walnut feel to the more utilitarian German and Japanese offerings. Now they could have these and a car that worked properly.

A possible restraint on sales could be the shortage of dealers. But Prof Rhys says Ford will tackle this: "I expect it to designate some of its outlets as Jaguar dealers to increase access."

However, Ford will have to be careful how it markets the new smaller car. It will share its fundamental design with a model made in the US, possibly a Lincoln. Keeping up the impression that it is a British car through-and-through will require all the company's ingenuity. Meanwhile customers who want to buy the last all-British Jaguar should snap up an XK8, which goes on sale in the autumn.